Find bond equivalent and effective annual yield to maturity

Reference no: EM131924143

Question: A 20-year-maturity bond with par value of $1000 makes semiannual coupon payments at a coupon rate of 8 percent. Find the bond equivalent and effective annual yield to maturity of the bond if the bond price is

a)$950

b)$1000

c)$1050

Repeat the question using the same data, but assuming that the bond makes its coupon payments annually. Why are the yields lower in this case?

Reference no: EM131924143

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